South-East and Scotland lead pensions pack but only half on track for decent retirement
Berkshire and Buckinghamshire residents are most likely to be on track for a moderate retirement income (52.3%) according to the latest findings of the HL Savings and Resilience barometer.
It was followed by Surrey, East and West Sussex with 50.6% and North East Scotland (50%).
No Northern areas featured in the top ten. The best prepared was North Yorkshire with 43.2% of residents on track for a moderate retirement.
West-Midlands has the biggest pension problem with only 28.9% on track for a moderate retirement income. This was followed by Shropshire and Staffordshire on 31.8%.
Some Southern areas were lagging with only a third of residents of Outer London: East and North-East being on track.
Moderate retirement income is as defined by the Pension & Lifetime Savings Association. It works out at approximately £20,800 per year for a single person and £30,600 per year for a couple.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“The South-East and Scotland rule the roost when it comes to retirement resilience but even here the terrifying truth is only half of people are on track for a moderate retirement income. This is not so much a pension hot spot – more of a damp squib and shows that even people in the most affluent of areas are not getting to grips with their retirement planning.
There were no Northern or Midlands areas even approaching the top ten with only North Yorkshire and Cheshire getting anywhere close. The Midlands has a real problem with only around a third on track for a moderate retirement income.
It is tempting to delay planning for retirement particularly in the current environment where the cost-of-living squeeze is putting pressure on everyone’s finances. However, not getting to grips with it risks leaving you seriously short of cash in later life. You may think you will be able to work for longer to plug the gaps but there is a strong possibility you may not be well enough by the time you hit retirement age to keep on working so you cannot rely on it.
Pensions are a hugely efficient way to prepare for retirement. As well as your own contribution your employer will also contribute, and you will also get an extra top up from government in the form of tax relief. Over time these contributions really add up and if you add in long-term investment returns then you can end up with a pension pot worth many times more than the contribution you have made. Put simply the earlier you start and the more consistently you contribute then the better outcome you are likely to get.
While budgets are tight it is important to only cut or stop contributions as a last resort. If you find that you really must cut back on pension provision be sure to increase it again as soon as possible to safeguard your future retirement income.”
Table – The most and least well-prepared areas
Source: HL Savings and Resilience Barometer
About the HL Savings and Resilience Barometer
In partnership with Oxford Economics the HL Savings and Resilience Barometer measures the financial resilience of the nation every six months, to see whether we are getting stronger or facing bigger challenges.
The Barometer is unique because instead of looking at specific aspects of our finances in isolation, it draws together 17 data points from a number of official data sets, across these five pillars to provide a holistic measure of the state of the nation’s personal finances.
It is structured around the five pillars of financial behaviour that we consider fundamental for households to balance current and future demands, while guarding against risks. These are: controlling your debts, protecting your family, saving for a rainy day, planning for later life and investing to make more of your money.
The aim of our work in this area is to help to promote awareness and understanding, inform the debate, and ultimately help improve the decisions individuals and policymakers make to improve financial resilience.